The purpose of this essay is to distinctively identify the effects of financial rewards on the work motivation of an organization and also whether or not this system of reward can cause an increase in the levels of work motivation already present in the organization. It furthermore aims to discuss weather Financial Rewards are the best way to increase the work motivation present. Although the essay shall primary be focused on Financial Rewards and Work Motivation, other factors that may have an effect on work motivation shall be discussed. For this purpose the understanding of work motivation shall be taken as such: The factors that are internal and external to employees that determine when he or she works, how hard he or she works and how long he or she works (Colquitt, Lepine and Wesson, 2009, pp.178-179). Furthermore the understanding of Financial Rewards to be undertaken is : The entire Reward System which focuses on Salary, Bonuses, Incentives etc., which aims to increase the amount of effort put in by the employees to achieve their work goals and increase work motivation in the organization as a whole (Hollyforde and Whiddett, 2002, p.166). By the conclusion of this essay the need for Financial Rewards its importance and status as apparently “the best way” to increase work motivation shall understood.
There have been countless efforts over the years to understand the numerous factors and desires that determine and help to fully appreciate the intensity, quality, efficiency and reliability of the work performance of an employee. Since the eventual progress of learning and observation of the environment and factors has led to the conclusion that an employee’s performance is one of the most distinguishing factors that the organization or a business needs to cultivate in order for the organization to succeed. Work has always existed and been around in one form or another throughout our history but it is only in the recent couple of decades that we have come to understand the motivation to work or simply work motivation (Kressler, 2003, p.3). We must also take into consideration that different ways of motivation are influenced or can be influenced by the cultural context that it is applied in. People of different cultures may be motivated in different ways by the same rewards or incentives. The System of Reward must not differ substantially from the culture it is implanted in. However we must also note that most motivational theories are biased in the sense that they are US centric and based on studies conducted on test sample populations that may reflect cultural connotations and behaviors only found in the US.(Chiang and Birtch, 2012, pp.538-541) A Theory that seems to understand the disadvantage of a system solely focused on Financial Rewards is the Cognitive Evaluation Theory by E.L. Deci in which Financial Rewards would be seen as the External locus of Control and as understood by this it lessens the intrinsic motivation of the employee or person. It is assumed that activities are likely to be sustained longer if started by being motivated by intrinsic motivation and not an extrinsic motivation (Hollyford, et al, 2002, pp.37-38).
According to the description by Kallberg and Rognes (2000) Non-financial rewards tend to have more broader aspects regarding improving performance and are focused on motivation for the long term of an organizations towards their employees. On the other hand as per Hofstede’s Topology in the category of Individualism-Collectivism explains Financial Rewards as being short-term and transactional in nature hence they are preferable for individuals who emphasize the aspects of individual contribution, individual ability and those that support that personal efforts are ultimately responsible for the job outcome. It is also suitable to people who see an increase in Financial Rewards as an attainment of Higher Status and Authority...
References: Armstrong, M. (2010). Armstrong 's Handbook of reward Management Practice Improving Performance through Rewards. 3rd ed. London: Kogan Page Limited. pp.143-144.
Armstrong, M. (2010). Armstrong 's Handbook of reward Management Practice Improving Performance through Rewards. 3rd ed. London: Kogan Page Limited. pp.147-150.
Chiang, F.F.T. and Birtch, T.A. (2012). The Performance Implications of Financial and Non-Financial Rewards: An Asian Nordic Comparison. Journal of Management Studies. Vol.49, No.3, pp.538-541
Ciorbagui-Naon, R. (2010). Modalities of Non-Financial Motivation of Employees Within Organisations. Annals of the University of Petrosani Economics. Vol.10, No.4, pp.44.
Colquitt, J., Lepine, J. and Wesson, M. (2009). Organizational Behavior Improving Performance and Commitment in the Workplace. 2nd ed. New York: McGraw-Hill/ Irwin. pp.178-179.
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Kressler, H. (2003). Motivate and reward Performance Appraisal and Incentive Systems for business Success. Hampshire: Palgrave Macmillan. pp.3
Hollyford, S and Whiddett, S
Hollyforde, S. and Whiddett, S. (2002). The Motivation Handbook. London: CIPD House. pp.166.
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